NHL Free Agent Frenzy 2013 - Melnyk's Budget Edition

Oglethorpe wrote:

wprager wrote:Let's get this discussion back to the off-topic topic.

I spend $100 on my 4 tickets, then pay $12 for parking.  Then I spend $20 on food/drinks, of which $10 is net income (being very generous here).  I've bought 3 jerseys over 15 or so years, and probably pay for tickets twice a year -- so $130 / 5 / 2 is $13 bucks.  Add some other crap (teeshirts, hats, etc.) and that's probably $20, of which at least $5 must be licensing fees that go to the NHL.  So all of a sudden my $100 "gate receipt" is actually $127 -- and that does not include TV contract, radio, internet, advertising revenues.

Sens had revenues of $113M in 2012, when they sold out (19,350) 41 home dates at an average ticket price of $58.  Gate receipts were roughly (19,350 * 41 * $58), so $46M.  They had 3 home playoff dates, so add another $6M?    So gate receipts were $52, which is less than half of the total revenue.

First off, playoff gates are not all gravy, 35% goes to revenue sharing regardless of team.   Second, the 14.5M operating income is prior to taxes, depreciation and interest. The big one is interest, since the Gene has obviously refinanced the team, the team debt is about 130M according to the Forbes report, so between interest and taxes I can see how he loses money.  Having said that he also makes other revenue through the building and capital tickets so overall I would estimate he does not lose money on these holdings.

wprager wrote:
Sens are *not* a money losing team.  A year ago he said that they don't even have to make the playoffs to break even.  Remember what I was saying when Leeder took over for Mlakar.  Mlakar was not a CPA; Leeder is.  He showed Melnyk how he could field a team that's not necessarily going to win the President's Trophy, and may even miss the playoffs now and again, yet remain cash-positive.

As pretty much all things, this is cyclical.  Melnyk's fortunes will either rebound or he'll be forced to sell to someone else (to pay off his debts, if it comes to that).  Sooner or later the Sens will be able to spend again.

Hoags wrote:

wprager wrote:
Sens are *not* a money losing team.  A year ago he said that they don't even have to make the playoffs to break even.  Remember what I was saying when Leeder took over for Mlakar.  Mlakar was not a CPA; Leeder is.  He showed Melnyk how he could field a team that's not necessarily going to win the President's Trophy, and may even miss the playoffs now and again, yet remain cash-positive.

As pretty much all things, this is cyclical.  Melnyk's fortunes will either rebound or he'll be forced to sell to someone else (to pay off his debts, if it comes to that).  Sooner or later the Sens will be able to spend again.

So basically what you're saying is this team will be run like the Panthers, Islanders and Predators etc.

wprager wrote:
There are two sides -- the financial and the hockey side.  The hockey side is solid.  We'll be fine.

DefenceWinsChampionships wrote:Salary cap aside we're going to be a really solid team. Eugene has to realize though he's one good move/signing away from being a real contender. Given our success last season plus the addition of a healthy Spezza, Anderson, Karlsson, Michalek, Cowen and now Ryan and MacArthur there is no reason to think the Sens can't push for home ice advantage in the playoffs. I think one more good defenseman, even if it means you trade some more depth to get a top-four guy, is the last glaring piece of the puzzle.

LeKing wrote:The Sens are the only professional sports team in North America who have the corporate sales problem because of federal regulations. That plus the fact that the building is in Kanata, the city is not that big etc.
That's a lot of disadvantages for an owner and I can understand he is pissed that his bid for the casino is not even CONSIDERED.
Now, the fact he is threatening to not spend more on the team if his casino is not built near CTC I am not a big fan of. But it doesn't make the City council's decisions more acceptable.

DefenceWinsChampionships wrote:Salary cap aside we're going to be a really solid team. Eugene has to realize though he's one good move/signing away from being a real contender. Given our success last season plus the addition of a healthy Spezza, Anderson, Karlsson, Michalek, Cowen and now Ryan and MacArthur there is no reason to think the Sens can't push for home ice advantage in the playoffs. I think one more good defenseman, even if it means you trade some more depth to get a top-four guy, is the last glaring piece of the puzzle.

Ev wrote:He is threatening that he won't spend any more money on other things in the city, IIRC

LeKing wrote:But it doesn't make the City council's decisions more acceptable.

SeawaySensFan wrote:

LeKing wrote:But it doesn't make the City council's decisions more acceptable.

Hopefully Alison Sandor will keep us abreast of any further developments.

tim1_2 wrote:

SeawaySensFan wrote:

LeKing wrote:But it doesn't make the City council's decisions more acceptable.

Hopefully Alison Sandor will keep us abreast of any further developments.

If only she was mustachioed.

Ev wrote:He is threatening that he won't spend any more money on other things in the city, IIRC

wprager wrote:

Ev wrote:He is threatening that he won't spend any more money on other things in the city, IIRC

Yes, he's also alluded to not being able to spend on the team.  Saying how they are now the youngest team in the league -- by design, not accident -- and how they will continue being the underdog.

“There is no Plan C,” Melnyk said just before the vote. He flew to Ottawa Tuesday morning and pulled up to City Hall in a black Cadillac Escalade, Senators president Cyril Leeder and right-hand man Ken Villazor at his side, to make his unsuccessful pitch.

The Senators lose money as a hockey operation, Melnyk said (“If you heard a number, it would be staggering,” he said); although his Ottawa entertainment empire makes some money off concerts as well, that’s not the business it used to be. He’s set a $50-million cap on player salaries and can’t afford to spend more, retooling the team into a young, inexpensive one that’ll need some luck to win consistently.

It pleases Melnyk to own a hockey team and he doesn’t intend to sell or move the Senators, but without a “third revenue stream,” his options for expanding the empire and renovating the arena are limited. “It puts a whole damper on my enthusiasm that I came here with 10 years ago,” he said.

Michallica wrote:

Ev wrote:He is threatening that he won't spend any more money on other things in the city, IIRC

He's also said that he doesn't have the money to spend another $5M-$6M on a player.  So sounds like he's threatening both ventures.

SeawaySensFan wrote:

tim1_2 wrote:

SeawaySensFan wrote:

LeKing wrote:But it doesn't make the City council's decisions more acceptable.

Hopefully Alison Sandor will keep us abreast of any further developments.

If only she was mustachioed.

With sausage gravy?